Shipping containers changed the world

It was 11:30 am on a sunny Tuesday in mid-April, and the Hong Kong Express had been docked at Hamburg’s Container Terminal Altenwerder for exactly 33 hours. Already, the ship was half empty. Cargo from Asia was stacked in neat rows of shipping containers on the dock.

Standing in its shadow, it’s hard to appreciate just how big the Hong Kong Express is. From stem to stern, it’s 1,200 feet, nearly a quarter of a mile; from side to side it’s 157 feet, about as wide as some mega yachts are long. Fully loaded, it can carry 13,167 20-foot-long containers, the standard box used in commerce around the world. Laid end to end, that many boxes—each one containing anything from T-shirts to TVs to truck parts—would stretch for 50 miles.

As the spring sun climbed higher, glinting off the placid Elbe River, some cranes nestled containers into towering metal racks on the ship’s deck while others lifted boxes out. At full tilt, Altenwerder’s custom-built cranes can simultaneously load and unload more than 150 containers per hour. Already, full racks of Asia-bound cargo towered 50 feet above the deck, corrugated steel containers stacked like Lego blocks six deep. Still more hid unseen within the behemoth’s matte crimson hull.

Before Wednesday dawned, the Hong Kong Express would be underway once more, sailing 70 miles down the Elbe to its mouth on the North Sea. Once it edged away from the Hamburg dock, its progress amounts to a snapshot of global commerce: first a brief westward sail to the English port of Southampton, then nearly a month chugging at 25 miles per hour to Singapore…

In less than two months the Hong Kong Express called at 11 ports and traveled more than 12,500 miles. Circling the world four or five times a year, it can move 1.4 million tons of cargo annually. That’s the equivalent of 1.8 billion iPads. The ship is a link in a long, complicated, and precise global supply chain made possible by the humble boxes on board.

More than any other single innovation, the shipping container — there are millions out there, all just like the ones stacked on the Hong Kong Express but for a coat of paint and a serial number — epitomizes the enormity, sophistication, and importance of our modern transportation system. Invisible to most people, they’re fundamental to how practically everything in our consumer-driven lives works.

Think of the shipping container as the Internet of things. Just as your email is disassembled into discrete bundles of data the minute you hit send, then re-assembled in your recipient’s inbox later, the uniform, ubiquitous boxes are designed to be interchangeable, their contents irrelevant…

The container’s efficiency has proven to be an irresistible economic force. Last year the world’s container ports moved 560 million 20-foot containers — nearly 1.5 billion tons of cargo altogether. Though commodities like petroleum, steel ore, and coal still move in specially designed bulk cargo ships, more than 90 percent of the rest — everything from clothes to cars to computers — now travels inside shipping containers. “Reefer” containers, insulated and equipped with cooling units, carry refrigerated cargo and are plugged into power sources on ships or at dockside. Because the containers are all identical, any ship can move them.

That’s just the beginning of the article. Romance to me. My life and time in two separate blocks – one of those about 15 years in length within the stream of commerce called traffic management. The longer chunk was more fun. Selling stuff that came in these containers to retailers. Moving it along to consumers.

“A quarter-mile-long megaship that’s the largest cargo ship ever to visit the U.S. eased its way under the Golden Gate Bridge with 20 feet to spare early Thursday as it headed toward the Port of Oakland.” http://www.nbcnews.com/business/business-news/biggest-container-ship-visit-u-s-barely-clears-golden-gate-n488641
“In an effort to move more cargo on less fuel, ocean freight carriers are in a race to build megaships with much larger capacities than the typical ships calling at U.S. ports. The average container ship being built now is nearly three times the size of the average a decade ago. The rapid increase in vessel size has posed challenges for ports around the world, which now must contend with enormous volumes of cargo arriving at once. The ports of Los Angeles and Long Beach, the nation’s two busiest seaports, have been among the first in the United States to deal with the advent of larger ships.” http://www.latimes.com/business/la-fi-ports-megaship-20151229-story.html

‘Zombie Ships’ Mask Parlous State of Container Shipping Industry http://gcaptain.com/2016/01/21/no-calmer-waters-in-sight-as-owners-of-zombie-containerships-try-to-tough-it-out/#.Vqa1sVK2hRk Note in link to The Loadstar: “According to recent analysis by Drewry Maritime Equity Research (DMER) container prices fell during the course of the year and by the final quarter of 2015 averaged $1,500 per 20ft, ending the year at $1,450 – the lowest level since 2003. Meanwhile, secondhand dry container prices declined to $830, below the previous minimum, seen in 2009. “Both new and used container prices are predicted to go on falling, or at best remain flat in 2016,” it said.

“Oakland’s Outer Harbor Terminal filed for Chapter 11 protection on Monday, two weeks after one of its biggest tenants said it was terminating a 50-year lease with the northern California port.” http://gcaptain.com/oaklands-outer-harbor-terminal-files-for-bankruptcy-after-loss-of-tenant/#.Vq_dxVK2hRk “Last month, Ports America, one of the largest marine cargo operators in the country, said it was shifting its business from the Oakland port to other cities along the West Coast, including Los Angeles and Long Beach. The Port of Oakland, located on the shore of San Francisco Bay, was one of the first ports in the world to specialize in intermodal container operations, but it is struggling to accommodate increasingly larger ships.”

Asia-Europe Container Freight Rates Drops 28 Percent (November 20, 2015) http://gcaptain.com/asia-europe-container-freight-rates-drops-28-percent/ The drop came after spot freight rates on the world’s busiest route dropped 39.3 percent last week, and the current rates are widely seen as loss-making levels for container shipping companies. …Maersk Line, the global market leader with more than 600 container vessels and part of Danish oil and shipping group A.P. Moller-Maersk, earlier in November reported a 61 percent drop in net profit in the third quarter.
The Danish shipping company controls around one fifth of all transported containers from Asia to Europe.

“Thousands of coffee cans wash up on Brevard beach” http://www.orlandosentinel.com/features/gone-viral/os-coffee-cans-brevard-beach-20151208-post.html “It’s believed that the cans fell off the 340-foot Columbia Elizabeth on Sunday after it left Port Canaveral to head to Puerto Rico. As many as 25 containers fell into the ocean and the search has been on since then to recover the cargo, according to the Sun-Sentinel.” http://www.sun-sentinel.com/local/palm-beach/fl-cargo-falls-off-barge-folo-20151207-story.html “Lost containers are a frequent casualty of ships crisscrossing the world’s oceans. Between 5 million and 6 million containers are in transit every day, and as many as 10,000 a year are estimated to end up in the water, according to a 2014 report prepared by scientists at the Monterey Bay National Marine Sanctuary for the U.S. Department of Commerce.
“The accumulation of these slow-to-decay structures year after year is a cause for concern,” according to the report.”

United Arab Shipping Company says its M.V. Al Muraykh, one of the world’s greenest containerships, has loaded a world record 18,601 TEUs (each 20-foot-long ISO container equals 1 Twenty-foot Equivalent Unit). http://gcaptain.com/uasc-containership-loads-a-record-18601-teu/#.VnGcS3u2hRk UASC says the Ultra-Large Containership (ULCV) departed Port Klang in Malaysia this week bound for Felixstowe in the UK as part of AEC1 (Asia-Europe Container) service carrying the 18,601 TEUs. The vessel will be sailing for two weeks. “This unprecedented westbound shipment is also UASC’s highest utilization to date of this very eco-efficient class, meaning the CO2 output per TEU on this journey is set to be more than 60% lower if the same containers were shipped on board a 13,500 TEU ship,” UASC said in a press release announcing the record load. See photo and video of the fully loaded ship departing Port Klang (Oct 9th, 2015)

(12/26/15) “Photos: First Ultra-Large Containership Arrives in the United States.” http://gcaptain.com/photos-first-ultra-large-containership-benjamin-franklin-arrives-in-the-united-states/#.VoALCFK2hRk “The largest containership ever to visit North America arrived at the port of Los Angeles early Saturday morning, marking the U.S. debut of a new breed of ‘mega ships’ that have until now only been seen in Asia and Europe. The 398-meter, 18,000 TEU capacity MV CMA CGM Benjamin Franklin arrived just after 4 a.m. at APM Terminals’ Pier 400 at the port of Los Angeles after sailing from China. The ship is one of a new type of Ultra Large Container Vessels (ULCVs – see link) being built at shipyards in Asia by some of the largest carriers to increase capacity and efficiency on the world’s busiest shipping routes. The vessels measure up to 400 meters long (1,312 ft.) and are designed to carry more than 18,000, and in some cases even 19,000 twenty-foot equivalent containers, but until now they have been deployed exclusively on Asia to N. Europe trade routes.”

“The largest bankruptcy ever to take place in container shipping now appears inevitable after the board of Hanjin Shipping voted unanimously to file for court receivership in South Korea today. And liner analysts warned box shippers and their forwarders to expect severe disruption throughout the container supply chain as the complicated web of alliances, vessel sharing agreements and slot swaps unravels. …Already there have been reports of some vessel arrests, with the 5,300 teu [ http://www.logisticsglossary.com/term/teu/ ] Hanjin Rome in Singapore and the 13,100 teu Hanjin Sooho in Shanghai reported to have been detained. http://gcaptain.com/alliance-partners-abandon-ship-as-hanjin-applies-for-court-receivership/ According to vesselsvalue.com, Hanjin’s 39 box ships have an aggregate value of $1.39bn, while the total value of its fleet, including tankers and bulkers, comes to $1.73bn.

(Oct 7) “Nippon Yusen (NYK), Japan’s biggest shipper by sales, warned it would book a $1.9 billion hit to first-half income, after the industry’s deepening slump forced it to write down the value of container ships and other assets. The shock writedown is the latest symptom of the dramatic slowdown in the container shipping sector. Weaker global trade, and in particular softer demand from China, has battered freight rates and left hundreds of ships idle. Chronic oversupply in the industry has already claimed one high profile victim this year: South Korea’s Hanjin Shipping Co Ltd, the world’s seventh largest container carrier before it went into receivership. http://gcaptain.com/japans-nyk-line-warns-of-1-9-billion-hit-on-shipping-slump/ “Analysts predicted more pain in the industry would be forthcoming. “I suspect the carriers are in a weaker position than they are admitting. The big question now is: can independent carriers survive or will there be a push towards partnerships, if not actual mergers?” said Richard Clayton, chief maritime analyst at IHS Maritime and Trade. The shipping industry has been hobbled by losses and debt, with NYK among the most indebted with a $7.2 billion net debt burden at the end of June.” See also “No Reprieve for Multipurpose Shipping Until 2018: Drewry” http://www.marinelink.com/news/multipurpose-reprieve416546

“Claims against Hanjin flood in as customers seek their cargo” http://www.joc.com/maritime-news/container-lines/hanjin-shipping/claims-against-hanjin-flood-customers-seek-their-cargo_20160902.html “…meanwhile there will be plenty of legal business to go around as shippers desperately try to free their Christmas cargo. Hanjin Shipping has a fleet of 100 ships and the Korea Ministry of Oceans and Fisheries estimates that as many as 540,000 twenty-foot-equivalent units [‘cargo containers’] are floating around on its vessels. …Hanjin vessels are stuck outside ports from which they have been denied entry, or are tied up alongside with terminals refusing to work their cargo.” See map for current positions of Hanjin vessels.

CMA CGM is rumored to be on verge of placing a massive order for the construction of up to nine 22,000 TEU containerships, which if built would be the largest in the world.
According to several reports, South Korea’s Hyundai Heavy Industries is competing with a shipyard in China for the contract to build the ships. Reports say the order, which could finalized in the new few weeks, will consist of six 22,000 TEU newbuildings with options for three additional vessels. Currently, the largest containership by TEU capacity is the 21,413 TEU OOCL Hong Kong. Upon its delivery in May, the vessel was the first to surpass the 21,000 TEU mark and only the third vessel to break 20,000 TEU. In 2015, the CMA CGM took delivery of 6 new vessels of 18,000 TEU, the largest vessels in its fleet. http://gcaptain.com/cma-cgm-readying-order-for-22000-teu-containerships-reports/
CMA CGM S.A. is a French container transportation and shipping company It is a leading worldwide shipping group, using 200 shipping routes between 420 ports in 150 different countries. Its headquarters are in Marseille, and its North American headquarters are in Norfolk, Virginia, United States. The name is an acronym, which, spelled out, would translate as “Maritime Freighting Company – General Maritime Company”. https://en.wikipedia.org/wiki/CMA_CGM